Case studies
Situation 1 - Mr and Mrs.X
Mr and Mrs.X had a mortgage and secured loan along with a number of unsecured debts. Many of the debts were credit cards with a high rate of interest; so whatever payments the clients made, it had no contribution to reducing the balance. The mortgage and secured loan payments had increased over the previous 6 months due to interest rate changes and this coupled with increased spending on the cards had forced the client to seek advice from a mortgage broker as they had missed some payments on their secured loan.
The payments to the unsecured were high and were putting the client into a position where they were either running late or missing payments on their mortgage and secured loan to support these debts. The clients were in fact running at a deficit on their income and outgoings and going round in circles.The solution that the broker looked at was to remortgage both the mortgage and secured loan together to reduce the high payments per month, as well as looking for a better interest rate. As they had a large amount of equity the broker advised them that they could include their unsecured debts into the mortgage and reduce the monthly payments overall. Obviously this would entail securing the debts for the clients on their house but as they were happy with this and the loan to value was still under 75%,then both the broker and the client felt this would be appropriate.
Situation 2 - Mrs.Y
Mrs Y had been in her Individual Voluntary Arrangement (IVA) for 4 years and as part of her arrangement, she was required to release a share of the equity in her house to satisfy her IVA.
She contacted her existing lender but was declined. She advised that the broker she had also missed a number of mortgage payment. The broker called Who’s Packaging? as he knew they were specialists for clients in IVA,s and could help find a solution.
The broker found it difficult to place the case as the client's current lender was classed as a sub-prime lender and with arrears in the last 3 months this was causing a problem for him to source a deal
Who’s Packaging? were in a position to suggest a new lender and product to the broker that would allow remortgage to raise a lump sum to pay into the IVA, as well as aking thet missed mortgage payments into consideration.
With their experience in the IVA market and the understanding of the lender's requirements, the remortgage went through smoothly and Mrs.Y completed her IVA successfully.
Many of the lenders on our panel cater for clients in both IVA's and Debt Management Plans. Please call our broker enquiry line 0844 8552167 on to discuss any of our cases in the above situations.